The operations of Yokohama Rubber are divided into two main segments. Read and find out more about the history of this Japanese firm.
The first segment, the Tyre Group, is responsible for more than 70% of overall sales, and divides its operations into three market categories: original equipment, replacement tyres and tyres for export. The second segment is the Multiple Business Group, which deals with everything apart from tyres: rubber industrial and engineering goods such as belts, hoses, sheets, coverings, and even sports equipment. For the greater part of its existence the firm concentrated mainly on its domestic market, but intensive consolidation in the world tyre and rubber industries persuaded it to expand its operations geographically at the end of the 20th century. This international activity, combined with emphasis on research and development, enabling the continuous creation of new products, gave the concern a strong position among its global competitors.
The beginnings of Yokohama
Founded in 1917, one of many Japanese industrial firms formed as a result of Japan’s opening up to the outside world at the end of the 19th century, Yokohama Rubber expanded in the 1920s by finding niches in the developing Japanese industrial infrastructure, where innovation was badly needed. The firm’s greatest success in that period was the production of a cord tyre, which came onto the market in 1921 and provided the foundation for the firm’s further development. The tyres previously used in Japan had normally been made with fabric, chiefly canvas. Yokohama’s Hamatown Cord, the first cord tyre to be sold in Japan, was three times more durable than fabric tyres, and quickly gained popularity on the country’s roads. At the same time the firm was also developing products for industrial systems, using rubber to improve the performance of conveyor belts used in the spinning industry and other sectors. In 1921 the firm began marketing rubber transmission belts with notched edges, which quickly replaced leather belts in many branches of industry, while continuing to improve its belt production technology. In 1929 it launched Japan’s first V-belt, which offered improved flexibility and better transfer.
Old Yokohama logotypes.
These early activities provided a basis for expansion in the 1930s, when the developing Japanese economy created high demand for rubber products used in cars and in various branches of industry. Yokohama developed balloon tyres, designed specially to avoid problems with overheating, as well as large tyres for heavy goods vehicles, tyres with Y-shaped treads, and – following a trend set in the United States – tyres with coloured sides. In 1930 the firm created a soft rubber lining used in the chemical industry to protect metals from corrosion and leakage, and also produced a hard rubber support to protect propeller shafts in ships.
A watershed in the development of Yokohama Rubber came in 1935, when it began to supply tyres to Japan’s largest car manufacturers, Nissan and Toyota, thus becoming one of the most important Japanese rubber goods producers. The firm’s growing reputation persuaded the Ministry of the Imperial House to place an order for a set of tyres for the car of the Japanese emperor; the contract included a year and a half of tests and development, and ended in the production of 24 tyres. The firm entered in the international market in 1934, when it obtained patents in Japan and in the United States for a single oil pouring hose. Two years later it designed and produced Japan’s first hydraulic brake cable for cars. In 1939 the firm took its greatest step so far in the developing synthetic rubber industry, producing its own first synthetic rubber.
Yokohama factory in Philippines.
The Second World War and post-war diversification
With the outbreak of the Second World War, Yokohama Rubber began making parts for aircraft, an area in which it had not previously been involved. In 1941 it also began making fuel cells, flexible pipes and tyres for the needs of the army and for the navy’s Zero and Hayabusa fighters. Because of the huge wartime demand for these products, in 1944 Yokohama opened a new factory in Mie in order to increase the production of tyres for military aircraft. The desperate need for vehicle and industrial parts in economically weakened post-war Japan prompted the opening of a further factory in Mishima in 1946. These two factories remained the most important elements of Yokohama’s production network until the beginning of the 1990s.
Like many areas of the Japanese economy, the rubber industry developed strongly in the 1950s, following the Korean War, because of the United States forces’ need for military products. This allowed Yokohama Rubber, which had gained a listing on the Tokyo stock exchange in 1950, to increase its share in the aviation products market by beginning the production of nylon cord aircraft tyres in 1955, followed in the next two years by aircraft fuel cells, hoses and self-sealing joints, thus helping to meet America’s military needs. In 1957 Yokohama began to produce and sell tyres for jet aircraft. Together with the expansion of aircraft parts manufacturing, the firm continued to launch new car tyres, which included the viscose-cord tyres introduced in the 1950s, Japan’s first tubeless tyres, tyres made from butyl rubber, snow tyres and nylon-cord tyres. The company also created the all-season Hamaking tyres, a basic design used widely in Japanese buses and goods vehicles at the start of the 1990s. The firm also began to market its first tyres made of synthetic rubber.
On the industrial side, the 1950s saw the production of an ever greater quantity of parts, including Japan’s first cord conveyor belts, using cord in rubber rather than cloth insulation, a material used in rollers in steel mills, pneumatic shock-absorbers for the Technical Research Institute of Japanese Railways, pneumatic rubber buffers used by ships in dock, nuts that would not be loosened by shocks, and rubber-based glues for brake linings. The growth in the range and quantity of products made was supported by an increase in production capacity, achieved thanks to two new large Yokohama Rubber factories, opened in Ageo in 1950 and Hiratsuka in 1952.
Modern Yokohama logo.
Further diversification in the 1960s
In spite of the expansion in the fields of industrial products and aircraft parts, the greatest part of Yokohama Rubber’s activity was still accounted for by car tyres. In the 1960s the firm moved forward with several innovations that strengthened its position as one of the best tyre manufacturers in the dynamically growing Japanese economy, with average growth of around 10% annually. The firm began to market all-steel radial tyres for goods vehicles and buses, studded tyres, racing car tyres, radial tyres for cars, and tubeless tyres. In the aviation field, Yokohama successfully bid to supply tyres for the Boeing 727 jets of All Nippon Airways Co. Ltd. Military contracts with the United States remained an important part of the firm’s business, motivating it to develop sealing compounds for aircraft and Teflon pipes. The firm also created new types of fuel cells, tyres, pipe and hose sets, additional fuel tanks, insulating blankets and de-icers for a new jet aircraft, and in 1970, a honeycomb filler and construction glues for use in aviation.
Yokohama’s diversification towards innovative industrial products was continued in the 1960s, when the firm introduced more types of conveyor belts, including nylon and fire-resistant belts, rubber road joints which could replace the existing metal types, rubber lining used in nuclear energy equipment, and rubber fencing used at sports stadiums. The firm also produced shock-resistant pipe connectors for submarines, underwater soundproof materials for warships, rubber sleeves for dredging, high-pressure hoses, liquid transportation tanks, a lining for waterproofing of roads, and newly developed materials for use as sealing compounds and lubricants. These achievements, based on unstinting research work carried out in all three of Yokohama Rubber’s main areas of activity, enabled the firm to enjoy significant benefits from Japan’s continuous economic advance. Yokohama was never solely a tyre company, and up to 1970 it strengthened its position as a large industrial group, offering products for many sectors of the economy. The opening of a new factory in Shinshiro in 1964 increased the firm’s production capacity, enabling it to maintain its existing diversity, and the opening of a Yokohama Rubber office in the United States in 1969 and a branch in Canada in 1970 were the first steps taken by the firm towards geographical and industrial expansion.
Tyre innovations and new industrial products in the 1970s
The increase in sales of all of Yokohama’s main product lines persuaded the firm to initiate a powerful investment programme at the start of the 1970s, which included among other things the opening of two new factories dedicated to specific purposes. The Ibaraki plant, opened in 1973, was to produce hydraulic pipes, while the Onomichi site, which began operating in 1974, specialized in large tyres for off-road vehicles. The firm was still gaining strength in all three areas of production, developing new solutions for the tyre industry, producing steel-belted radial tyres for cars, radial tyres for mud and snow and other off-road tyres, as well as aluminium wheels, and improving the type of rubber used to produce its tyres. In the 1970s Yokohama Rubber continued to expand its range of industrial products, launching rubber protective barriers for motorways, rubber barnacle shields for ships, a layered construction material with a honeycomb structure, new types of hose, rubber bags for oil slick response, a weatherproof surface for tennis courts and running tracks, hot-melt adhesives, soundproof rooms, shockproof and soundproof materials for making pianos, watertight floors for ship holds, and many other products. At the same time it also expanded its activity in the field of aviation: it still produced fuel cells, pipe systems and other items created in the previous two decades, while also improving its old designs and introducing new products. In 1972 the firm produced an electrical device to prevent icing of helicopter blades and damage-resistant fuel cells for aeroplanes, and in subsequent years made further improvements in insulating blankets, honeycomb panels and pre-pregs (semisolid materials composed of resin-impregnated reinforcing fibres, used to produce load-bearing aircraft parts, which need to be light but strong). Yokohama also began producing equipment for rockets, including heat exchangers and bellows. The firm’s industrial diversification continued in 1983, when it began producing sports equipment in collaboration with ten manufacturers specializing in that field.
Increased competition in the 1980s
The sudden strengthening of the world tyre and rubber industries at the end of the 1980s and early 1990s forced Yokohama to change its policy of concentrating mainly on the domestic market. “Buy or be bought” was the rule, in a market which had been compacted from 14 competing firms controlling three-quarters of the world market between them, to the “big three” of Goodyear, Michelin and Bridgestone controlling more than a half of world tyre sales. Unlike its global competitors, Yokohama’s strategy focused on smaller joint ventures and links between firms rather than mergers and takeovers, although it sometimes applied the latter strategies as well. In 1984 the firm separated its Canadian branch from its operations in the United States, and in the following year it bought a 26% stake in the Malaysian tyre firm IT International, in a transaction that involved Yokohama giving technical assistance to the Malaysian firm. Two years later it launched an enterprise in the United States producing and selling automobile equipment – Aeroquip Automotive – jointly with Yokohama Aeroquip Co. and Aeroquip Co. USA. In the same year the firm bought a 10% stake in the largest South Korean tyre producer, Hankook Tyre Manufacturing Company, and in the next year began collaborating with the Rubber Research Institute of Malaysia on developing an extraction and powdering technology to obtain useful substances from natural rubber residues.
In 1987 Yokohama went ahead with a project to expand the operations of the aircraft parts factory in Hiratsuka by producing large engine parts for the H-11 rocket. It bought a 40% stake in a firm producing printed circuits for industrial machinery, Togoshi Co., and signed an agreement with the American company Technical Wire Products Inc. for the production and sale of that company’s products in Japan. It also set up a joint venture company with another American firm, Morton Thiokol Inc., to produce and sell polyurethane sealants for car windscreens in the United States. In the same year Yokohama demonstrated the standard of its technical achievements to the world by terminating agreements with several American and European tyre manufacturers that had previously supplied it with technical know-how.
Following a exchange of shares with another Japanese firm in the rubber industry, Toyo Tyre and Rubber Co., Yokohama formed a joint venture company in 1988 with the Marubeni corporation for the purpose of supplying car tyres and steel radial tyres for goods vehicles and buses in Germany. In the same year the firm took its largest step to date on the huge American tyre market, when in a joint venture with Toyo and the German industrial group Continental Aktiengesellschaft it began building a factory to produce radial tyres for goods vehicles and buses in the US. The factory, located in Mount Vernon, Illinois, had the capacity to produce up to 880,000 tyres annually. Yokohama made one more move in the American market in 1989, purchasing Mohawk Rubber Co. Ltd., with its tyre factory in Virginia, rubber industrial products factory in Ohio and tyre treading plants in Alabama and California, for around $150 million. Soon afterwards the firm announced that it planned to spend $200 million over the next five or six years on increasing plant production capacity. In the same year Yokohama stepped up its assault on the American market with its first television advertising campaign, and formed a joint venture company with Hankook in South Korea for the production of tyre tubes and protectors. Yokohama’s president Kazuo Motoyama summed up the direction being taken by the firm in 1989, saying “We do not have the least intention of remaining a local Japanese tyre producer.”
Yokohama in the 1990s – globalization, focus on research and development
Considering its relatively late entry to the world rubber market, Yokohama Rubber used tactics of rapid expansion, which included both organic growth and acquisitions, at the start of the 1990s. In 1990 alone Yokohama bought 49% of the Taiwanese rubber hose manufacturer Shieh Chi Industrial Co., started up production in Portugal, signed a five-year technical agreement with another South Korean firm Bukdoo Chemical, and took the first steps towards exporting radial motorcycle tyres to Brazil. The firm planned to expand from the Asian and North American markets to that of Europe, setting up factories and distribution centres on that continent. Increased penetration of the Asian and Pacific Rim markets followed the setting up of new production operations in the Philippines and Australia midway through the decade. Together with its rapid geographical expansion, Yokohama continued to finance its research and development programme. This enabled new products to be created in several areas, including a conducting antistatic floor material, printed circuit boards that transferred heat better than conventional boards, new pre-pregs for use as basic structural elements of aircraft, new glues for vehicle windows, and a radio wave insulating room with smooth flat walls, a response to the needs of electronic equipment manufacturers.
This geographical expansion and broadening of the range of products had the aim of combating the still powerful competition, particularly from the world market leader Michelin, which at the start of the 1990s initiated a price war. Hoping to seriously weaken its rivals, the French firm planned price cuts for the duration of the approaching global recession. Together with many of its competitors, Yokohama experienced falls in sales and profits in the first half of the decade. Earnings fell from 441.4 billion yen in 1991 to 379.4 billion in 1994, while the net profit of 5 billion yen changed to a loss of 207 million in 1993, before rising back to a level of 2.1 billion yen during the same period. (A change in accounting dates meant that the company’s financial year for 1995 lasted only three months, from January to March of that year.)
Although sales in the 1996 financial year (which ended on 31 March) showed the first year-on-year increase since the start of the decade, the net profit continued to decline, falling to 563 million yen (5.3 million dollars) from 1994. The company’s executives blamed the weak results on its United States subsidiary, Yokohama Tire Corp., which had suffered financially as a result of simultaneously high debt servicing costs and expenditure on raw materials. Reorganization of the American operation in the middle of the decade was intended to increase productivity through simultaneous increase in production capacity, strengthening of distribution and workforce reductions.
Midway through the decade Yokohama seemed to have accepted its position outside the industry’s big three. Instead of engaging in the battle for sales in the low-margin original equipment market, the firm’s future strategy continued to focus on research and development, with particular attention to high-margin niche products. It seemed unlikely that the firm would abandon its main tyre-related activity, which included the production of original, replacement and specialist tyres and still accounted for more than two-thirds of sales in the mid 1990s, but it nonetheless expected that sales of products not related to tyres would show the fastest growth in the final years of the century.
- 1917 (October) – company founded in Yokohama in Kanagawa prefecture, as a joint investment by Yokohama Cable Manufacturing Co., Ltd. (now Furukawa Electric Co., Ltd.) and BF Goodrich of the USA.
- 1919 – building of the Hiranuma Plant in Hiranuma, Yokohama.
- 1929 – building of the Yokohama Plant in Tsurumi district, Yokohama.
- 1937 – change of trade mark used for tyres and industrial products to “Yokohama”.
- 1944 – building of the Mie Plant.
- 1950 – purchase of the Mishima Plant from Meiji Rubber Manufacturing Co., Ltd.
- 1951 – completion of building of the Hiratsuka Plant.
- 1961 – completion of building of Yokohama’s new headquarters.
- 1963 – founding of Hama Chemical Co., Ltd. / Firm’s name changed to Yokohama Rubber Co., Ltd.
- 1969 – completion of building of the Research Centre. / Founding of Yokohama Tire Corporation in the United States.
- 1974 – trial start-up of the Onomichi Plant. / Completion of first stage of building of the Ibaraki Plant and start of operations.
- 1976 – founding of Yokohama Tyre Australia Pty Ltd.
- 1983 – founding of Sports Complex Co., Ltd.
- 1984 – founding of Yokohama Tire (Canada) Inc.
- 1986 – completion of building of D-PARC (Daigo Proving-Ground and Research Centre) for comprehensive tyre testing.
- 1988 – founding of Yokohama Reifen GmbH. / Founding of Tokyo Hamatite Co., Ltd.
- Founding of GTY Tire Co. Ltd.
- 1989 – creation of T*MARY (Takasu Motoring and Researching Yard) for specialist winter tests. / Purchase of Mohawk Rubber Company, USA.
- 1991 – completion of building of the RADIC R&D centre at the Hiratsuka Plant.
- 1992 – founding of SAS Rubber Company.
- 1993 – specification of standard actions relating to environmental protection and preparation of an environmental action plan. / Safe tyre system and environment-friendly tyres exhibited at the 30th Tokyo Motor Show under the title “Yokohama Advanced Car System”.
- 1994 – founding of PRGR Co. Ltd.
- 1996 – Yokohama Aeroquip becomes a subsidiary company wholly owned by Yokohama Arise Co., Ltd. / Founding of a firm selling tyres and accessories for camper vans. / The name Yokohama Aeroquip is changed to Yokohama Hydex Company. / Founding of Yokohama Rubber (Thailand) Co., Ltd., producing windscreen sealants and fitting hydraulic pipes. / Hiratsuka Tire Plant obtains an ISO 9001 certificate.
- 1997 – building of a new factory producing windscreen sealants in Kentucky. / Completion of building of a new sealant factory at the site of the Ibaraki Plant. / Founding of new firms producing and selling tyres in Vietnam.
- 1998 – the Mishima Plant obtains an ISO 14001 certificate. / Efforts are initiated to obtain certificates for all factories by the end of 1999. / The Shinshiro Plant and Hiratsuka Tyre Plant receive the TPM Excellence Award.
- 1999 – the Mie Plant obtains an ISO 14001 certificate. / Efforts are made to obtain certificates for all factories by July of the same year. / Yokohama Tire Philippines, Inc. obtains an ISO 9002 certificate a year after starting operations. / Yokohama Hydex Company obtains a QS 9000 certificate, the quality system for the big three American car manufacturers, and an ISO 19001 certificate. / ISO 14001 certificates obtained for all domestic factories. / Scholarship fund set up by Yokohama Tire Philippines, Inc.
- 2000 – Yokohama Rubber (Thailand) Co., Ltd. obtains QS 9000 and ISO 9002 certificates. / The functions of selling, designing and developing hoses and connectors are transferred to Yokohama Hydex. / YH AMERICA Inc. obtains a QS 9000 certificate. / Yokohama Tire Philippines, Inc. obtains an ISO 14001 certificate.
- 2001 – Yokohama Rubber Co, Ltd. forms a strategic partnership with Continental AG. / Start of the “Zero Emission” programme, aiming to reduce quantities of industrial waste at landfill sites. / Two Yokohama Hydex Company sites, the Hiratsuka branch and the Nagano plant obtain ISO 14001 certificates.
- 2002 – preparation of the “Grand Design” long-term business strategy. / YH AMERICA Inc. obtains an ISO 14001 certificate.
- 2003 – Yokohama Rubber (Thailand) Co., Ltd. obtains an ISO 14001 certificate. / Four domestic production plants achieve zero emission status. / Yokohama Rubber plans to create a base for the production of radial tyres for goods vehicles and buses in Thailand, to begin in April 2005.
- 2004 – a new Belgian tyre sales firm set up by Yokohama Rubber is to start operations this year. / Yokohama Rubber plans to create a new firm producing and selling sealant for cars in China. / Yokohama Rubber plans to create an integrated enterprise dealing with the production, fitting and sale of hoses through the absorption of Yokohama Hyde. / Personnel changes on the firm’s executive board. / Yokohama Rubber plans to create a subsidiary in China selling and fitting high-pressure hoses.
- 2005 – Yokohama Rubber creates a fully independent subsidiary selling tyres in Korea. / Yokohama creates a firm selling tyres in Russia. / Yokohama’s European branch is to become an overseas subsidiary coordinating sales in Europe. / Yokohama Rubber plans the building of a factory in Thailand, to produce tyres for cars and light goods vehicles. / Yokohama’s Thai subsidiary officially opens its factory producing tyres for goods vehicles and buses. / A joint venture company is to produce and sell conveyor belts in China. / A new firm is to oversee business operations and tyre activity in China.
- 2006 – Hangzhou Yokohama Tire, belonging to Yokohama Rubber, secures a base in China for the production and sale of radial car tyres, operating in accordance with ISO 14001. / Yokohama Rubber announces a new management plan: Grand Design 100. / Yokohama Rubber plans to strengthen European sales of goods vehicle and bus tyre sales through collaboration with a leading tyre treading company. / Yokohama Rubber plans to create a subsidiary in India. / Revised forecasts for the first half of the 2007 financial year...
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